The U.S. Department of Transportation announced Monday that it is recommending a fine of more than $9.6 million against Houston-based Panther Operating Company for a November 2023 deepwater oil spill off the coast of Louisiana.
The penalty is the result of an investigation by the Pipeline and Hazardous Materials Safety Administration and the recommended levy of $9,622,054 is described as the “largest civil penalty ever proposed” by the agency, which oversees the operation of the nation’s 3.3 million-mile pipeline transportation system.
Panther Operating is a portfolio company of Third Coast LLC, a Houston-based energy investor. The company was informed of the proposed penalties in a letter to dated Dec. 31, 2025, from Bryan Jeffery Lethcoe, director of the PHMSA’s Southwest Region office.
The company has 30 days to respond.
In response to a request for comment, a spokesperson for Third Coast replied with the following:
“After constructive engagement with PHMSA over the last two years, we were surprised to see aspects of the recent allegations that we believe are inaccurate and exceed established precedent. We will address these concerns with the agency moving forward.”
“Third Coast consistently meets or exceeds regulatory requirements across our operations. Our commitment to compliance, safety and operational integrity remains central to who we are as a company,” the statement concluded.
The 22-page letter describes the Nov. 15, 2022 incident involving the Main Pass Oil Gathering system owned by Third Coast and operated by Panther Operation which resulted in a 9-hour spill that released an estimated 27,000 barrels of crude oil, according to the National Transportation Safety Board.
The spill resulted from the failure of a collet grip flange, a device used to connect subsea pipelines, at MP 69. At the time of the incident, the MPOG system was transporting crude oil from producers through four miles of 20-inch pipeline, and 61 miles of 18-inch pipeline with a maximum pressure of 1,920 pounds per square inch, gauge (psig).
The letter said Panther received a first indication of the spill at 7:30pm when a control room observer noticed an imbalance between the pipeline’s input and output causing flow meters to register zero. The letter said that despite these indications of a problem in the system, there was no shut down of the system until 6:30am the following morning when a new controller reported for duty.
An NTSB investigation into the incident began that day, November 16, 2023 and was concluded on June 13, 2025.
In its letter to Panther, the PHMSA faulted the company in 11 specific areas of violation upon which it based its $9.6 million recommendation in four individual fines of more than $2 million each.
On the whole, the agency faulted Panther for their use of a mechanical collet grip flange. The agency said the use of the device as part of the pipeline design failed to provide for the “expansion, displacement-stress relief, and load-management” required for the environment. The letter noted that Panther had acknowledged that the pipeline had likely been damaged during and by the harsh weather storms familiar to the region.
In the second count, the PHMSA alleged that Panther had known of such displacements in the pipeline since 2004 and had acknowledged movement in the pipelines during inspections required after several large-scale storms, including their own post-Hurricane Ivan repairs in 2005. The agency said that despite repeated evidence of geotechnical risk, Panther had failed to incorporate them into their integrity management schedule. “As a result,” said the letter, “Panther’s integrity assessment schedule did not account for known threats that directly affected the structural integrity and stability of the pipeline segment.” And for that they received a recommended fine of $2,576,627.
Likewise, the agency said Panther had failed to evaluate its means of risk detection and had been unable to produce any such evaluation conducted before the incident, despite references to their intent to do so in their formal integrity management program. Nor were the programmatic responses supported by automated imbalance alarms or other response criteria, instead relying on controller interpretation for interpretation and response. Recommended fine: $2,234,400.
The agency also faulted the Panther for its failure to include procedures for “responding to, investigating, and correcting” unexpected changes in pressure or flow rate outside normal limits. Specifically, the manual included no level of pressure or flow at which the controller would be required to shut down the pipeline. Recommended fine: $2,234,400.
Finally, the agency said Panther had failed “to maintain each valve necessary for the safe operation of its pipeline system in good working order at all times.” Recommended fine: $2,576,627.